tv The Kudlow Report CNBC January 15, 2010 7:00pm-8:00pm EST
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tonight, in a special edition of "the kudlow report," we'll review the washington assault on stocks on wall street and go money and politics. political favoritism, crony capitalism and their negative effect of stocks which suffered in the new year. but an earthquake may be forming in massachusetts where republican scott brown's tax cutting opposition to obama care could pull off one of the greatest political upsets in history against democrat, martha coakley since the truman beat dewey. that could stop the tax and spend virus including the obama care's latest bribe to exempt big labor from the so-called "cadillac insurance tax" until 2018 while the rest of us stiffs have to pay for it. in an era of obama political
favoritism this is a new low. fasten your seatbelts, everybody. "the kudlow report" begins right how.ç good evening. i'm larry kudlow. welcome back. we believe that free market capital similar still the best path to prosperity. tonight we'll review the washington assault on stocks and wall street. tonight's money politics message, no wonder stocks had their worst week in the new year. the index has lost about a per seventh and president obama announced more problems with the banks. this is an tie growth. al qaeda is the enemy, not the banks. next thing you know the white house is going to dispatch the u.s. marines to go door-to-door on wall street roots out evil bankers and i'm only half kidding. bankers have not have paid bonus until they have de-t.a.r.p.ed
that was a banker mistake. but i find it interesting that fannie and freddie are exempt from the tax or any bonus criticism, while they are digging taxpayers in for hundreds of billions of dollars a debt. we're rewarding the losers and punishing the recovering winners. meanwhile, the financial crisis commission forgot to question helicopter ben bernanke's ultralow interest rate policies. not to speak of their omission of fanny, freddy for government bankers. 42 of 54 economists believe john taylor's rule should have been used and ben bernanke's attempt at removing fed blame for the housing bubble was wrong. today's consumer price report was tame. but for all of 2009, the cpi
increased 2.7% meaning once again, deep negative real interest rates continue to fed emergency policy long after the emergency is passed. are we doomed to repeating the mistakes of the 2000s? that's a key question. this week's economic sthaths painted a generally positive picture. december retail sales increased about 5.5% from last year. that's good. business sales and inventories were up strongly. that's also good. industrial production registered its sixth straight monthly gain and a 9% annual rate. intel and jp morgan earnings beat the street but their stocks fell anyway. so my question is -- is all the good news already priced into the stock market? we're going to ask our distinguished panel just that in just a moment. meanwhile, the anti-free market washington tie could be stuck on this coming tuesday if republican, scott brown,ç defes democrat, martha coakley.
we'll get into that with pollsters and political experts later in the show. it could be a seismic event. perhaps mr. brown can stop another health care bribe that exempts big unions from the so-called "cadillac insurance tax" until 2018. the rest of us will be stuck with that bill and it's a complete outrage. and finally, three cheers for google who struck a blow for human rights and freedom with their blistering attack on china's cyberterrorism. google removed sensorship from its search engine in china and is threatening to leave the country. now, that is what i call leadership and i think i saved the best for last this evening. now, i want to hear about all this from our distinguished panel all these issues and our investor outlook. joining me here at cnbc, we have mike holland, chairman of holland and company. barbara morrison. portfolio manager. and michael pinto and joining us
from texas, jim la camp. everybody, this is a great experiment and it's a lot of fun to do a special edition of "the kudlow report." barbara, i want to ask you this point. with washington doing what its doing, which doesn't appear to be particularly helpful right now, nonetheless, we saw good earnings but the stock market went down 1% across the board. not the worse thing in the world. is all the good economic and earnings news already in the stock market? is that possible? >> i think it is possible. the market is up 70% since the march 9th lows of last year. and with that, we're selling at about a 15 price earnings multiple on this year's earnings and baked into that is about a 25% increase in earning. to be positive on the market, i think we have to think that not only are we going to get growth from inventory restocking which
we'll have, but we'll see a better employment picture which i don't think we'll have for another couple of years for a few reasons. >> a couple of years? >> yes. until 2012, i think. >> wow. >> and we have to think that consumers are going to return to their old spending ways and consumers that have boosted their savings's rate in the past year will continue to hold a higher saving's rate. as they need to feel the need to rebuild their somewhat lower housing wealth and stock market wealth i think we'll continue to have a higher saving's rate. so i don't think it's a return to that picture. >> you sound cautious about the stock market in light of those economic remarks? >> yes. >> fair? >> yes. >> what are you looking at? suppose you're right? you've been frequently rightç the past. let me note that. what do people do with that point of view? >> the stock market delivers its long-term return of 9 or 10% in an uneven way. i didn't expect the last 12 months to have this kind of return so i don't think it makes
sense to be in or out of the market. it's hard to get that right twice. i think there's a sweet spot in very large 450i-quality companies that -- high quality companies that sell globally with decent balance sheets and pay good dividends, like craft, general mills, dupont, ibm, intel, you can get yields of 3, 4, 5 or even 6% some of these, like verizon and bristol myers. and you can build a portfolio for yourself where you get a return of 3 to 4% as a current return fairly easily and wait until we get better value built into the market. >> that's an interesting point of view. jim, where are you? i have a million screens. there you are, handsome devil that you are. you heard barbara's point of view. you probably agree with her caution and i won't call you a bear but you're a bullish bear. first of all, i want to ask you,
as a near-term bull you're not fighting the tape as i understand it. you like the fed easy money, at least in the short run. what about this washington assault and what about the tax on banks? what about the insurance tax that the labor unions are exempt? that means you and me and others will have to pay more on that? we have spending and taxing and we got regulating. david goldman was on the program last night talking about how that's so bad and those are all obstacles for small business job creation which is what barbara just said. jim, talk to me about washington to wall street and the impact on stocks right now. >> when we had dinner a couple of months ago you said "this is the great monetary experiment." and i agree. the steer roar interest rate policy is working. the fed is like a spoiled rich kid. they are getting everything they want right now. the problem is that it's also the great fiscal fiasco. we're seeing unbelievable
attacks on private capital of private enterprise and small business owners are catching the worst of it and the worse part about that is that small business owners hire 84% of americans. and 60% of new jobs. and so they are very uncertain and they don't know about the health care package and they don't want it. payroll taxes. now the banks are going to be taxed. if you tax the banks who's going to pay that tax? do we really think this isn't going to be passed along to consumers? >> jim, let me ask you. aren't bankers evil and greedy? look how they pay themselves these incredible bonuses? that'sç the washington line. soon we'll extend marines to the financial district and root out all these evil, greedy bankers. what's your take on that? the obama bankers tax? >> i think the obama administration is misfiring here. they're trying to create this pop laos ground swell against the -- populous ground swell.
serve worried about their jobs not the bankers. and the administration is making it difficult for people to have jobs. the good news we could see in the short term is tuesday's elections could really change -- be a game-change her terms of health care plan and the whole mood and woepgd see a 94-style rally where you had the contract with america that brought people back out into the optimistic camp. >> mike, was the bankers tax anoumtd and brouhaha the reason for the drop in financial stock this is week? or, in fact, were the jp morgan earnings and revenues that much disappointing? when i got the news they beat the streets' estimates but everyone was picking away at them and suddenly we had a decline across the board. the banks fell earlier in the week on the o announcement of the tax. which is more important. the bankers tax? the earnings or revenues? does this mean everybody is down grading and not jp morgan and morgan stanley and all the rest of them?
>> jp morgan's numbers to put a point on this, they were excellent numbers. >> yeah. >> and the market went down. financial stocks led the market down. people then look for an excuse. they said, well, the retail part of the business wasn't so good or the revenues were under what we had expected them to be. the people who looked at them early in the day and looked at the numbers said, these are really good numbers. so nothing wrong with jp morgan. >> what hand? it got slammed and everybody has a bad attitude about it. >> you pointed out the tax. the tax is simply a symptom, a political symptom of what's going on in washington. and unfortunately for jamie diamon he's in that group that he's in these panels for cnbc. >> we didn't invent these hearings. you were referring to the financial eye sis and investigatory panel, mr. bill thomas and -- we just covered it, michael. we didn't create it. >> the front page of all the major newspapers in the world
that these guys are being grilled by these smart people who care about us. >> who care about us? you don't seem to believe that? >> well i think there may be a little political motivation. having said that, these stocks like jp morgan are up a ton. the market is up 70%. they are up 400% a lot of them. >> does this cast a poll on banks? >> a great reason to sell. >> all right. let me go to michael pinto. michael, inflation report in december was very tame. i think it was up 0.1%. now, i knowç -- you're going t launch into a rant and it's okay because i will say this. mr. bernanke talks about deflation. really, from the moment he aches up he starts to worry about depression and deflation because his academic thesis was written about the great depression of the 190s. is he bronx? what did you gather from the cpi
today? up 2.7%? >> that doesn't sound like deflation to me and negative real rates aren't the best thing for the stock market. i'll take the one-year treasury which is about .4% and it's attractive at 2.7% and i getity negative number but i want to talk about the market. we're hopefully exiting the great recession. and it's worse than the recession in 1983. when unemployment was 10%. in 1983, you had taxes that were formed. you had interest rates that were falling. the fed funds rate went from 15% to 6% in just three years. and if you're not -- you're not going to have the tail wind like you had in the early '80s. >> irrelevant's going higher. interest rates are headed higher and inflation is headed higher and taxes are headed higher. >> let me cross-examine you. >> please, do. >> we had john taylor on several times and he wrote a hard op-ed
piece to bernanke saying, you're wrong. >> mr. kudlow, where does the taylor resume say the fed fund rates should be today? >> if the economy continues to grow at 4 or 5% for another quarter or two it will be at least a 2% funz rate. >> the answer to me question is he would have the interest rate at 0% today -- >> but not if the economy zblees no if and or but. we're saying fedded is behind the curve. >> are we doomed to repeat the past? >> of course we're doomed. >> negative real rates means that i can -- i love america. i don't want to say we're doomed but how can i expect a different result with negative real rates being that negative. they are getting more negative. >> are you buying more stocks? >> i'm buying international stocks with dividends. >> have you given on the reinflation play? >> no.
>> you've been right for much of the year. >> the fed's balance sheet continues to grow. until they find a way to hit a new high this week -- until they can find a way to unwind the balance sheet without destroying the economy i have to stay long gold. precious metals, base metals and energy. >> what do you think of mr. pinto's analysis? buying gold and precious medals and thinks the fed is too easy for too long and thinks real interest rates are negative.ç these are -- >> i like those factoids from an investment standpoint. every country in the world is trying to destroy their own currency. they wanted their currency cheap. as everybody races to the bottom on their currency the things that you can't print more of like energy, oil, natural resources, base metals, precious metals become more valuable so i like the trades. beyond that, i still think beyond all the deflation their and de-leveraging issues that we have to work through, the emerging markets will provide a
tremendous amount of growth. if i'm right about that you'll see more demand on the energy and on base metals and on commodities. so i like these commodity-based stocks for both those reasons. either you'll have global growth or not. >> oil fell, gold fell and the dollar fell this week, too. all the asset classes fell. hang on. we'll be back. i want toe talk about oil and gold and talk about all these other stocks and talk about technology and talk about some more dividends and i want to talk about what washington is really doing. i've got to turn over here and do this right. we're just feeling our way. i want to talk about what washington is really doing to the stock market and maybe scott brown up there in massachusetts can turn things around. this is a special edition of "the kudlow report." we're reviewing all the events of the past week and trying to connect the dots between money, politics and stocks and we have a distinguished cast that will help me do it. you're watching cnbc, first in business worldwide.
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welcome back to the special edition of "the kudlow report." somewhere out there is our great friend, jim la camp who i think is in the great state of texas. mike, i want to review the bidding for a second. barbara is bearish on the economy. pinto is getting more and more bearish on the economy. i can't quite figure out la camp. we'll get back to him. i see a mini boom. i think the numbers in the fourth quarter that we'll get in a week or two will be strong. let's not forget we had strong industrial production. good, decent retail sales. the trends on business sales and inventories look good. trends overall on profits look good. profits are the mother's milk of stocks, business and economic growth. despite all the negativeness from washington, the actual
numbers may be in spite of washington are rather good. do you agree with that?ç duties agree with that? how do you play it? >> what was the question? >> i'm in joe's seat. >> a quick answer is "yes." mini boom sounds a little bit too. >> and they haven't completed the cycle. it's in the process of turning. it should be given the depth at which it went. it should be up 6, 7, 8% but if we get four, five or six people will say it's a mini boom, certainly the democrats in washington will say it's a mini 3w5078. >> i'm saying that. >> there's no jobs. >> i'm not a democrat and i'm not in washington but i'm saying that we'll have a mini boom based on an objective analysis of the empirical statistical evidence coming out of washington. sometimes you have to take your political lens out and put your -- analytic lens in.
>> the numbers are the numbers and i think six months from now we'll say that's better than we thought. >> so do you agree, therefore, with barbara morrison? she's taking a rather defensive position. it may make sense and we'll come back to it. this week her stuff did very well. what do you buy? besides -- what are you buy something. >> i think there are at least two areas that have not been in massive move up in all the markets around the world that mike and jim and barbara have talked about. massive moves around the world in virtually everything. natural gas is left behind. very smart people known as exxon went out and bought something called xto and they paid something like, i think when you work out the numbers it's like $7 per -- the way they measure it which is down around 5 or 6. i think this last time they bought something called "mobile" they did very well. do you know the price of oil when they did that, when they bought mobile was $10 a barrel?
>> where is it going? we thought it was going to 100 and it fell five straight days. >> it's up seven times from where they bought mobile. >> where is the oil going? >> unfortunately, i think it's going to go higher. >> it will go to china and i go to taiwan and i see the boats going up and down the river. why did they fall this week? >> same reason jp morgan fell. who would have expected oil was supposed to be here three and six months ago? we had a lot of stuff down at very low levels including the gas market. >> let me go -- >> $1.50 at the gas pump. >> gold went down. oil went down and the dollar is kind of flat. today the dollar had a terrific day up against 15 of the top 16 currencies. so i would say to you, for the reinflationist that you are and that includes michael pinto and we'll put the heat on him ifç a minute. reinflationist, easy-money crowd, the fed, antiking dollar crowd, why is stuff happening
that shouldn't happen? dollar better? gold down? oild down spp there a reversal? and bond rates went down and treasury rates which traded up as high as $3.85 a week or two ago clouds below $3.70 so stuff is happening. what's going on? >> well in terms of the treasury rates, don't forget we've had troubling economic data mixed in with the positive data. we had a lousy december jobs' report. unemployment claims were up. the december retail sales number wasn't very good and when you look at what jp morgan said about why they're empx and revenues were not as good as they thought it's at the heart of everybody's concerns and that is that lending is down, credit is down and whether they still have troubled assets they will continue top accelerate. >> those are all lagging indicators. i already know that. tell me something i don't know. i want to know why the commodities got crunched this week? that's an interesting point. a week ago, rates were rising,
commodities were rising. oil was going to 100. lord knows what was going to happen with iran and yemen and all of that. now we had terrible earthquake in haiti this week. we had terrible economic policies. higher taxes on banks. obama care might win unless this guy brown can win up in massachusetts. what is causing -- is the market running a little ripple of deflation here? i want to ask that. sometimes all the smart money can be wrong. >> the market's wrestling way lot of forces here and you have to look at a longer term picture than a week. these things have been tremendous uptrends. we've seen gold make a gigantic move over the last four or five months and oil too. they won't move in a straight line. they're very volatile and news-driven. the good news is it creates opportunities for investors. speaking about natural gas, i like that long term -- >> hang on.
we totally exhausted the natural gas discussion. i know more about the exxon portfolio than i -- barbara, on the way out. we're trying to -- >> let me address the oil. >> we'll give you an address on oil but it's going to have to wait until the next segment along with pinto. barbara morrison, you like dividend stocks and i want to note health care did very well despite the fact that georgiaj pummeled. that's, direct opposite of the commodity reinflation play so i've got a ballot here. the reinflationism on the one side and the more defensive, slow-growth dividend play on the other side. give me a hint. health care and consumer staples. why are they hot? health care in particular.ç is the 2k3w06 tagovernment take health care? that's a kudlow question. >> yes. >> it doesn't look good to me but that's okay, whatever. >> we'll just -- well, that's
why these stocks are good buys a lot of them because over the last 12 months with the discomfort had in investing and i'll throw united health care in there. now that we see the plan will not, perhaps, have a public option, may not be as draconian as we thought at first -- >> that plan night be beaten. i don't want you to speculate. i know that's not your business. >> anything is possible. >> what about the pharmaceuticals, for example? what do you make of that? they are high dividend payers. do you like them? >> i do. they are conflicting, of course -- there's a lot of pricing pressure with drugs going to generics and pricing pressure because of our health care, the increasing costs. on the other side we'll have more people, if we do pass this plan, to balance that. there lsh more people who are covered. and i think that most of the difficulty has been priced into the pharmaceutical stocks so i think the multiples expand. the dividends are good and they
have strong balance sheets and i think they can help to spur the growth with acquisition. >> hang on. we'll be back. we got to get pinto back. he'll tell me why it is the commodity and gold stocks are falling all the sudden. is ben bernanke wrong? is john taylor right? i want to talk about technology, also. very important. later in the program, an earthquake may be forming in massachusetts. can tax cutting republican scott brown pull off the greatest political upset since truman? and can this one guy, a state senator, no one ever heard of him two or three weeks ago, could he completely change the washington situation? economic policy, health care and higher taxes? and maybe end the antigrowth virus that's been spreading in recent months? "the kudlow report" is coming right back to report on all of this. please, stay with us.
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welcome back, everyone. this is a special edition of "the kudlow report," washington to wall street. money, politics, higher taxes and more regulations. on the other side, a good mini boom cooking. stocks had their worst week in the new year to explain all this and more, we have mike collin, barbara morrison, michael pinto and jim la camp. michael, i didn't mean to short-change you in that last segment but i do have some unfinished business with you. why is gold going back down?
gold peaks a couple of months ago? >> yes. >> and you're an inflationist. >> yes. >> are you still buying gold in. >> yes. i sold it about a month and a half ago and i'm buying back half my position when we speak, not now, only when the market is opened. >> thank you for sharing that. >> i'll tell you why gold fell. two reasons. first, the trouble with euroland. greece is having problems. that made the dollar rise against the euro and people that that since the dollar is rising we have to sell gold. two, the chinese are raising interest rates which means that that might dampen the demand for gold. that's th cyclical reason why gold fell in the last couple of months. and number three -- >> quick aside, is jim chanos right about the chinese bubble. >> he is. >> i wanted to move on and get that. >> they're not as bubblition as
we are -- >> the threat of takeovers, they are prominently permanent wards of the state and the obama care bill. is that bullish or bearish for gold? >> i would say it's bullish because it creates. >> because we're going bankruptcy in the united states? >> the bottom line is the debt of the nation is increasing dramatically. we have a $106 trillion projected debt and that must be monetized and that will send gold higher. i want to say two quick things about the economy. we continue have retractible inflation or hyperinflation. the consumer has twice as much debt as they did in 19 3 and total loans and leases are down 7.7% year to year. there's going to be no boom. maybe a little one. >> i want to know your single favorite investment. >> right now. >> yes. >> right now, sqm, im gold, gg. >> jim, you're single favorite investment after you have seen
everything out of washington and the possibilities of relief in this massachusetts race, which we'll get to later in the show, and the fundamentals of profits and economic growth and jobs and what not, what is your single-best favorite investment? >> emerging markets on a broad basis and energy on a long-term basis. >> elaborate on the emerging markets. you're playing a weak dollar play on the emerging markets rebound are you not? isn't that the backbone. >> two weeks ago every smart an hisself talked about a strong dollar. i'm asking you about this. >> it's not just the strong -- the dollar. the dollar has long-term head winds and michael pointed air lot of those out and they haven't gone away. emerging markets have better demographics from a population standpoint and they also have technology gaps to try to -- that they have to improve and that will take many, many years. that means a lot of spending on technology and they're going to go through the same demographic shifts that we went through in this country over the last 30
years that drove consumer spending higher and our markets higher. >> is jim la camp -- is that aa crowded trade, barbara? i'm not saying he's wrong. he has a good record this last year. the most famous bullish bear in america. okay? everything you ask him about, except he continues to buy stocks, and he's done very well. a very clever strategy. my hat's off to him. i couldn't get away with that. i want to ask you. this emerging çmarket, cheap dollar, buy gold trade. is it too easy? is it too crowded? >> i think it's very much priced in and very much accepted that that's where it is now. that being said, trends go on longer than you think that they will but i don't think there's a lot of money to be made there in the next 12 months. >> do you think that the stock market, for the remainder of this year is going up and down? unbalanced? we get to the end of year, where do you think stocks will be? 10,500 on the do you and 1100
something on the s&p. higher or lower by year end, by your judgment? >> i think it will be about this level unless something happens to drive us down i think peel be here until we price better value in over the next year or two. >> and mike, i'll give you the last word, because of your vast w0r8d knowledge and wisdom. how important are politics to the stock market? i know we talk a lot about it but there's always issues, much of what goes on in the stock market is organic to profits and companies and the economy. how do you read that right now? >> during my lifetime, i would bet that -- with the most important politics is to the stock market. >> our great friend is worried and i think correctly so, about left-wing p left-wing poppism.
and the t.e.a. party movement which may rear its head in massachusetts on tuesday, i call it free-market populism. is there a free-market populism that could improve our nation's politics and might that energize the animal spirits of the stock market? >> it's there. you're observing it. it has not been to away as a lot of people said several months ago that it would. it is, in fact, growing. i don't think a lot of people were involved in that. i think there are democrats and middle of the roaders and independents and i think what we're talking about is adults are coming back into the picture. we've had some silly things go on in the last year in terms of policies. doug kass is a great example. he worked for ralph nader. he's not exactly a t.e.a. party kind of guy and he's saying we'll get away from these policies, when wl it's scott brown or --
>> i challenged him in an e-mail. i said your threat of left-wing populism is good. but right-wing t.e.a. party. populism is coming and if i teep talking i'll persuade myself that the political situation will be çbetter. i want to thank all of you. michael pinto, as always. and jim la camp you'll come here next time we do this roundtable. i want to see you up here. let me check in with melissa lee. she's got options, actions agenda tonight. melissa, i hope i didn't steal your thunder? >> jiem-packed earnings special. we have the setup on goldman sachs. nervous about your google stock? an option strategy that can protect your profits for free but still give you some upside. back to you. tune into the "options action" and she mentioned google stock. i'm in love with going '.
i have no idea about the stock market evaluation but what they did this week, to attack chinese cyberterrorism and stand up for human rights was one of the best thing i've seen out of american business in queen how many years. coming up next, the coveted ted kennedy senate seat could go to the republicans on tuesday. in a new poll, scott brown leads martha coakley by four points. we have the pollster to go inside the numbers and then some great political commentary. keep it here. hope springs eternal. i love america. we're "the kudlow report." ♪ [ male announcer ] introducing the all-new lexus gx. ♪ it has the agility to avoid the unexpected...
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the ted kennedy seat could go to the gop on tuesday? in a new poll, scott brown leads martha coakley by four points, incredible. joining us to go inside the number, we have the director of the politico research center in boston. we're delighted to have you back on the show. >> great, thank you. good to be here. >> all right. tell me first of all, were you in the field today? i want to know, is there any spot polling going on in the overnight polling that you can report to us? >> no we were not. monday night, the last televised debate on tuesday and wednesday
and we wrapped up wednesday night. >> there was a big swing for brown of the debate, was there not? >> yes, there was. >> she bombed. coakley bombed. i make no bones about it. i want scott to win. but i say objectively when i read about the debate it seemed like he was -- he beat her badly? >> i think independents are always looking to see both candidates on the stage. and most of the time in massachusetts, independents default to the democrat. in this case, you have a lot more going on between the economy and health care. and i think scott brown showed that he was being forthright in his answers and very independent. >> how big is the independent move to brown? >> it's very big. 65-30. other polls have it even higher. i think 65-30 is the right number. independents make up the majority of registered voters, 51%. you're talking about as i look at your poll, you're polling registered voters.
is it possible in an odd, off-year election or let me say, off-month election, to get -- to go to the a lot of likely >> we're polling likely voters. beyond the registered voters screen, we asked respondents if they were likely to vote in the special election and secondarily, whether or not they could name the date of the special election so that if they said september or november, they were screened out. so we believe it's a very good pool of respondents that will accurately depict at least what the sentiment was between monday and wednesday. >> what are likely voters saying? what are the numbers? bigger than four or how does it rate? >> independents, especially, are break overwhelmingly for scott brown. democrats, 77% are going with martha coakley. 17% of democrats are flipping to brown. so that's a big concern as well for the coakley campaign. >> all right. david, thank you ever so much. i'm waiting to see if you're going to come back out over the
weekend. coming up, scott brown could win. that's correct. could the political carnage for the democrats? i don't know. if brown wins he's going to have an immediate impact on the health care debate in washington and on the tax debate and on a whole lot of things. this whole anti-growth government-controlled tax and spend virus. scott brown, single-handedly, who would have thunk it. a state senator unknown until a couple of weeks ago, heck, until he came on my show. two top-notch political all-stars. charlie cook and larry will run this down. and by the way, it was charlie cook's swing a couple after weeks ago that alerted me to this whole scott brown story. stay with us. what are you doing...?
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welcome back. the special election to fill ted kennedy's seat is on tuesday. the question is will scott brown's massachusetts momentum stop the tax and spend washington virus? joining us, two distinguished old political pros. charlie cook and larry sabato, director of university of virginia's center for politics. you know, charlie, you really, i read your stuff on a daily basis and you set me on to this.
maybe i was laying a lot of conservatives were watching this race. i know it's hard to predict. i'll ask you a different question. is this or could this be a continuation of what we saw last november where the democrats -- the republicans jumped on the democrats in virginia and new jersey? and i'm especially thinking about new jersey, charlie, because it's such a blue state, sort of like massachusetts. could this be a continuation of that? >> i think we've seen democrats having growing problems since last summer. look, a weak democratic candidate running a lousy campaign in massachusetts, he ought to still win by 10 or 15 points. note my -- no doubt the democrat also throw martha coakley under the bus if she loses like they did creigh deeds in virginia. this is much bigger than that. this is a continuation. conservatives really, really motivated and moreç importantl than that, you have independents have are very, very critical of democrats for having pushed
health care over the economy. and as a result, they're spitting mad. >> that independent thing as we just heard from the poll, you regard that as serious? >> there aren't enough republicans or conservatives or t.e.a. party people in massachusetts. i mean, the republicans, they are a third-party in massachusetts. there aren't enough. it's the independents unset with the priorities that are making a difference. we're seeing nutty poll numbers. one came out today that had brown up by 15 points. another one a few days ago that hat martha coakley up by 14. that's equally nutty. i think this poll is dead on and it's about four points that brown has moved a bit ahead. he's had the momentum. he's a little bit ahead. if you put a gun to my head i would pick brown but this is still very, very close. >> it is, after all, massachusetts. larry, happy new year to you, my
friend. let me ask you won't be larry, a simple question. t.e.a. party, pitch fork, populism. we hear a lot about it. i know there's skeptics about the whole t.e.a. party movement but going from new jersey to virginia and now massachusetts, i'm sniffing out a t.e.a. party spirit, if nothing else, larry. i want to ask you about scott brown because i think he's run a very clever campaign, capturing some of those t.e.a. party themes. what's your take? >> well you better believe he's run a clever campaign for somebody with the republican label to be on the virge of winning a senate seat held by ted kennedy for all those years and held by the democrats for 57 consecutive years means he's run a clever campaign. the t.e.a. party people, i think there's a misconception out there that they are overwhelmingly republican. from my contacts with them, i find while they often vote republican, they are very independent. larry, the independents who are
voting in massachusetts or appear to be ready to show up on tuesday, are a lot like the independent who is did show up in new jersey and virginia last november. they're not a sample, a random sample of the independents. they are more conservative independents who are upset about the obama administration, whether it's health care or the stimulus spending. >> taxes. >> or the national debt. unfortunately they're conservative independents. >> brown plays those issues like the fiddle. in some sense, unlike chris christie, who was very vague on these economic issues, brown has gone head-long into them. as you know he ran those jfk tax-cutting ad. he was on this program about ten days ago. he was s crystal clear about cutting taxes and being opposed to obama care. the clarity was breath-taking, larry. >> yeah. the other side of that is that martha coakley's campaign just never got off the dime.
i've been told she took a six-day vacation out of a five-week campaign which is not a good sign for a candidate. she wasn't taking this seriously. the other thing is, there are always things you can use on the other candidate. as a state legislature, if coakley had been on the mark, her campaign could have used that and batted down some of brown's points. but she didn't do it. >> let me go to charlie. charlie, this may be unfair the last 30 or 40 seconds. bill clinton's up there today? he's saying, vote for coakley. that's an insult to massachusetts voters. i want to ask you, obama is coming into the state. remember, charlie, obama came into new jersey at the last minute for corzine and it back fired. could obama, who may be the problem, really clinch it for scott brown? >> i think obama isn't the problem. the thing is obama's job ratings
in massachusetts are high. they have to get the democrats out. you do whatever it takes. they got to get the democrats out or they're in going to lose this thing. and so they've got to solidify their base. >> i've got to leave it there. sorry we don't have more time. thank you ever so much. coming up, my last thoughts. stay with us. small business owners have a lot of questions. can paperless billing get me paid faster? how can i keep my best employees? how can i bring down my insurance costs? and while at american express open we may not have all the answers, we know who does. other owners. that's why we're helping business owners connect. together, we're building a community for them to talk, share and help each other. a place called openforum.com where owners can swap ideas and ask questions. will tweeting get me more customers? how can i make my business green? and one question seems especially popular. how can i get paid faster? how can i get paid faster? i was about to ask you the same thing. and they're inspiring ideas like acceptpay.
number two, the economy is stronger than most folks think. and number three, one way or the other, we're moving toward a political turning point when this big government, tax-spend and regulatory virus is soon going to be healed. that's my take. i'll be back here monday morning with "the call" and melissa frances and "the kudlow report" as usual, at 7:00 p.m. have a good weekend.